S. Gopalakrishnan and Srinivas Talluri, the two partners of PwC's Indian unit, Price Waterhouse (PW), were arrested in Hyderabad by the local police in January after the technology outsourcer's founder and former chairman Ramalinga Raju admitted to overstating the company's profit and revenue and creating a fictitious cash balance for several years, thrusting Satyam to the heart of India's biggest corporate fraud inquiry.
The accused have always maintained that they had conducted audits "in accordance with applicable auditing standards and were supported by appropriate audit evidence" and were ignorant about the fraud that was being perpetrated by Ramalinga Raju as they were not in a position to question the authenticity of the documents provided to them.
Satyam's former CFO, Srinivas Vadlamani, who has also been arrested for helping Ramalinga Raju carry out the crime, earlier gave a clean chit to the PW partners, saying they had no role in the fraud as they were given forged documents by the management for audit purposes.
However, both the PW partners were severely criticized for failing to detect the $1.5 billion accounting fraud that was being brazenly carried out by Ramalinga Raju for over seven years, despite having been appointed as Satyam's statutory auditors since 2000.
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